Another record low for New Hampshire bankruptcies

As jobless claims rise to record highs, the number of bankruptcies has fallen to near record lows in New Hampshire,

Some 76 individuals and businesses filed for bankruptcy protection in May. That number is the lowest since 1988, save for three months in October 2005, shortly after the rules changed and it made it harder to file for protection.

In April, there were 99 filings. That’s the lowest number – besides the 2005 anomaly — since 1989.

The number of filings in May was a 23% drop from April, which was a 34% drop from March, and a 59% drop from May 2019.

What is going on? Bankruptcies are a lagging indicator of the state of the economy, so this could just reflect the strength of the economy before the pandemic struck. But it might also reflect all the programs that were quickly put in place to shore up business and individuals.

Businesses that might have considered filing for bankruptcy now have access to low-interest or forgivable loans. Laid-off employees and owners of shut-down businesses can file for generous unemployment benefits.

Finally, bankruptcies might just be harder to file, given the difficulties – lawyers, clients and the courts – during the pandemic, though the filing process has been electronic for decades.

Under the CARES Act, there are changes to bankruptcy law, but they made it a bit easier on businesses, and harder on creditors, which should result in more filings, not fewer.

In May, there were three filings involving business-related debt. One filed as an individual, and two businesses filed corporately, one of which NH Business Review previously reported on:

• Cate Street Capital Inc., Portsmouth, filed May 12, Chapter 7. Assets: $200,042. Liabilities: $3,613,283.

• Neonbomb LLC, Manchester, filed May 15, Chapter 7. Assets: $13,615. Liabilities: $48,326.